Politics, Economics and other Stuff

Unintended Negative Effects of EU Biofuel Policy?

I need to find a much more detailed write-up of this claim:

Only recently have conservationists begun to grasp what a debacle it was to enact climate change legislation in Europe without first putting in place global deforestation treaties. EU policies promoting a market for biofuels triggered the destruction of Indonesian rain forests in favor of palm plantations.

Supposedly this more than offset any possible positive effects of these biofuel policies (which, within the framework of EU climate change legislation may already be close to zero or negative without taking trade related effects into account). 

In general, one of the big issues looming in climate policy is the trade induced effects if policy is not uniform across jurisdictions, as it is sadly bound to be.  Differential policies across jurisdictions can both drive up economic costs and lead to additional adverse environmental impacts. 

It would be good to know more....

Fish Update

Here is our fancy goldfish this morning.  It has some black trim on the tail fins now, a new development.  We'll see if it is transitory and maybe just a late effect of the trauma of the last few weeks, or a new problem I'll need to deal with.  For now I'm just keeping the water clean and using some low salt doses. 

Afghanistan Update

No real reason for posting this beside the final remark.  Abu Muqawama links to a story in the NYT:

American commanders are planning to cut off the Taliban’s main source of money, the country’s multimillion-dollar opium crop, by pouring thousands of troops into the three provinces that bankroll much of the group’s operations.

The plan to send 20,000 Marines and soldiers into Helmand, Kandahar and Zabul Provinces this summer promises weeks and perhaps months of heavy fighting, since American officers expect the Taliban to vigorously defend what makes up the economic engine for the insurgency. The additional troops, the centerpiece of President Obama’s effort to reverse the course of the seven-year war, will roughly double the number already in southern Afghanistan. The troops already fighting there are universally seen as overwhelmed. In many cases, the Americans will be pushing into areas where few or no troops have been before.

Through extortion and taxation, the Taliban are believed to reap as much as $300 million a year from Afghanistan’s opium trade, which now makes up 90 percent of the world’s total. That is enough, the Americans say, to sustain all of the Taliban’s military operations in southern Afghanistan for an entire year.

“Opium is their financial engine,” said Brig. Gen. John Nicholson, the deputy commander of NATO forces in southern Afghanistan. “That is why we think he will fight for these areas.”

Which seems like a very bad strategy designed to piss people off and provide the Taliban with a nice economic interest group constituency.  How do they come up with this stuff?  Does counter narcotics every work as an approach to dealing with an established insurgency?  Comments at Abu Muqawama suggest that destroying drug crops and then compensating farmers for them will accomplish two additional things: a) provide cash the insurgents, b) provide farmers with no crops to tend and time for other activities.  We might as well just start paying farmers to join the Taliban.

But here is the final remark:

"John Nicholson" is an awesome if tragic name for a brigadier general wandering around South and Central Asia looking for ass to kick. 

"Everyone generalizes from one example. At least, I do."

Is this true?  Yvain writes:

There was a debate, in the late 1800s, about whether "imagination" was simply a turn of phrase or a real phenomenon. That is, can people actually create images in their minds which they see vividly, or do they simply say "I saw it in my mind" as a metaphor for considering what it looked like?

Upon hearing this, my response was "How the stars was this actually a real debate? Of course we have mental imagery. Anyone who doesn't think we have mental imagery is either such a fanatical Behaviorist that she doubts the evidence of her own senses, or simply insane." Unfortunately, the professor was able to parade a long list of famous people who denied mental imagery, including some leading scientists of the era. And this was all before Behaviorism even existed.

The debate was resolved by Francis Galton, a fascinating man who among other achievements invented eugenics, the "wisdom of crowds", and standard deviation. Galton gave people some very detailed surveys, and found that some people did have mental imagery and others didn't. The ones who did had simply assumed everyone did, and the ones who didn't had simply assumed everyone didn't, to the point of coming up with absurd justifications for why they were lying or misunderstanding the question. There was a wide spectrum of imaging ability, from about five percent of people with perfect eidetic imagery to three percent of people completely unable to form mental images. 

Googling reveals that there is indeed a famous 1880 psychology paper by Galton on this topic, as well as later work. 

I couldn't actually say, off the cuff, how much mental imagery I have --- none flashes immediately into my mind.  I do have pretty good physical imagination, in the sense of being able to imagine how spacial relationships, movement/flow and forces work.  Pushing things around and imagining how to manipulate them falls into this category and the standard 3-D mental rotation tasks are pretty straightforward.  Imagining full faces, on the other hand, isn't so obvious.  Colors are also, for the most part, not important in my mental imagery, while temperature or blinding light is.  

If mental imagery is actually as diverse as suggested above, this strikes me as extremely intriguing and puzzling.  Why is this? 

The FHFA Home Price Index rises for a 2nd month...

Lat week the FHFA came out with its home price index for the February, and home prices were up by 0.7% over January, with January's increase of 1.7% over December revised down to 1%. This week's release of the Case-Shiller home price index for February, on the other hand, showed yet another decline, by 2.1% in a month.  I am intrigued by this large difference in the two indices, not just in the magnitude of the change in price but by what looks like a difference in direction as well.  It is interesting that houses that transact with conforming mortgage financing are appreciating, even if the overall market is in decline. On the other hand, I don't understand why this divergence exists or how to interpret its import. The biggest increase in the FHFA index is in New England, up 3.8% in two months. 

E-Filing Taxes and Spouses

I e-filed my taxes this week after the customary extension on April 15 (I've not filed before April 16 since I've been married).  One thing I've been wondering about: since e-filers do not sign their returns and just verify their identity by providing their Social Security numbers and the AGI [adjusted gross income] from the previous year's income tax filing (as well as making up PIN numbers for later access to the tax filing), how does this affect spouses?  With paper tax filings, the spouse has to sign the tax return and this provides some evidence that the spouse has at least seen the tax return and maybe read some of it, for instance the AGI number.  How many husbands file electronically and don't involve their spouse at all?  I know of husbands who don't tell their wives what they earn, understating their income substantially, and this just further their ability to keep their wives in the dark.  I assume it isn't uncommon. 

In my case, I told my wife I was filing and she didn't request to review it.  So no, she didn't see this tax return, though she will get to file the print-out of the pdf (but I need to get a new toner cartridge first).

And it might make 'innocent spouse' claims easier as well.  

How important are resource constraints in Afghanistan?

What are the non-political resource constraints on the US and European countries in Afghanistan?  What are the political non-resource constraints?  We need to distinguish different types of resources.  Not clear to me. 

I've been thinking about writing a post about this for a while.  I'm reminded of the question since Phil Zabriskie writes about what he hears from locals on his most recent trip to Kabul:

[There is] absolutely no faith in this government, and a lingering sense of confusion about what exactly the US and the international community is doing here. Thoughts along the lines of, “the west could defeat the Taliban, but they do not, so they must want the Taliban here.”

One alternative hypothesis is that more resources, both military personnel and economic aid, are themselves destabilizing or at least don't contribute to immediate or medium run stability, both for the South of Afghanistan and over the border in Pakistan. 

The Atheist Overcount in Britain

via MR, the BBC reports:

About 390,000 people listed their religion as Jedi in the 2001 Census for England and Wales. In Scotland the figure was a reported 14,000.

The Office for National Statistics did not recognise it as a separate category, and incorporated followers of Jedi with atheists.

Asian Deserts and Forests during the Last Glacial Maxium

Asia 18,000 years before present.  Note the extensive deserts and limited and regional forests.  Temperate forests are basically only in southern Japan and around the coast of the Yellow Sea. 

 

Taxes and Credit as alternative methods of identifying Ability to Pay

More later...

Our Fancy Goldfish Hospital

Our fancy goldfish seems to have fully recovered from a near death experience with extreme lethargy, total loss of buoyancy control and being nibbled by the other goldfish (which came to a head over Easter while we were away).  It took about two weeks of nursing, including segregation, salt and tetracycline treatment.  All this mess was due to a lack of water changes and gravel vacuuming, i.e. ammonia poisoning.  Now we're just left with frequent water changes until the biological filter recovers from the antibiotics.  I hadn't realized how prone to buoyancy problems fancy goldfish are, though it makes sense one you think about it. 

Update #1: it seems Geoffrey Miller has a book out that explains, among other things, 'Why owning a pet and actually managing to keep it alive is a good signal to a potential mate.'   And I did hear from our summer babysitter that her college roommate did manage to kill off a hamster she got as her secret santa present in only a few weeks (despite 'really wanting' the hamster).  So no, I had to make the effort to keep the fish alive, just as a signal to my kids.  And yes, I do remember how my parents killed off my goldfish in 1972. 

Update #2: Jody comments:

That, was a very clever way of separating the fish. I'm going to remember that trick.

And Jody didn't even hear the debate about aluminum poisoning my wife and I had.  Turns out aluminum poisoning isn't an issue except for low pH aquariums, and our pH is slightly over 7. 

Deleveraging?

People across a wide spectrum of perspectives keep mentioning deleveraging as one of the key dynamics of the current crisis -- what's the best way to think about this phenomena? 

Survey Errors

This is a pretty impressive survey error, especially given the relatively non-sensitive nature of the question.  Monkey Cage writes:

In a study reported in the current issue of Public Opinion Quarterly, Markus Prior says ... self-reports of exposure to the evening news shows are grossly off.

That conclusion is based on Prior’s comparison between self-report data from the 2000 National Annenberg Election Survey (NAES), on the one hand, and ratings of news audiences based on Nielsen’s “people meters,” on the other. (In each of 5,000 Nielsen households, each TV set was attached to a meter that household members used to indicate the beginning and end of their viewing.)

Prior’s basic finding:

The survey estimates vastly overstate the size of the network news audience. According to Nielsen, between 30 and 35 million people watched the nightly news on an average weekday. Based on NAES self-reports, that number is between 85 and 110 million for most of the year. In other words, the ANES -based estimate is somewhere around two-and-a-half to three-and-a-half times higher than the Nielsen-based estimate.

Oof.

But it gets worse. The overreport factor varies from one part of the public to another. For example. For viewers aged 55 or more, it’s about two-to-one; but for those in the 18-34 age range, it’s somewhere around six-to-one or even eight-to-one.

Testimony of Dr. E. Calvin Beisner to the Subcommittee on Energy and Environment of the Committee on Energy and Commerce of the United States House of Representatives Wednesday, March 25, 2009

via Deltoid, the Testimony of Dr. E. Calvin Beisner to the Subcommittee on Energy and Environment of the Committee on Energy and Commerce of the United States House of Representatives Wednesday, March 25, 2009, which I ran across since I was googling for information on today's Climate Change hearings with Al Gore and Newt Gingrich:

I am convinced that policies meant to reduce alleged carbon dioxide-induced global warming will be destructive, devising mischief by decree. As Lord Monckton points out in his own testimony today, the best, most recent empirical scientific discoveries have shown that even the mid-range scenarios of the IPCC exaggerate the warming effect of increased CO2 by at least seven times; atmospheric CO2 concentration is rising at a fraction of the rate forecast by the IPCC; and Earth has been cooling for the last seven years at a rate of 3.5F per century.

These findings, opposite the expectations of the IPCC, are consistent with the Biblical world view. The naturalist, atheistic world view sees Earth and all its ecosystems as the result of chance processes and therefore inherently unstable and fragile, vulnerable to enormous harm from tiny causes. The Biblical world view sees Earth and its ecosystems as the effect of a wise God’s creation and providential preservation and therefore robust, resilient, and self-regulating–like the product of any good engineer who ensures that the systems he designs have positive and negative feedback mechanisms to balance each other and prevent small perturbations from setting off a catastrophic cascade of reactions. The IPCC’s work rests on the naturalist, atheistic world view. Every one of its computer climate models, without exception, assumes that positive feedback mechanisms vastly outnumber and outweigh negative feedbacks, which is the root of fears of a runaway greenhouse effect and a “tipping point” beyond which there is no return.

The IPCC exaggerates the rate of carbon buildup because it doesn’t recognize the capacity of Earth’s plants and oceans to absorb vast amounts of carbon from the atmosphere and turn it into the building blocks of life. But that is precisely what has been happening, with wild and cultivated plants growing larger and more numerous because of increased CO2, and raising crop yields (and so lowering food prices. And the IPCC exaggerates the warming effect of CO2 in the atmosphere largely because its computer models all assume that clouds are a positive feedback–that they respond to rising surface temperature by trapping still more heat. But University of Alabama climatologist Roy Spencer, using data from NASA satellites, has shown the opposite: warming clouds diminish as surface temperature rises, allowing more heat to radiate out to space. The system works like a thermostat, keeping surface temperature within a narrow range well suited to human and other life on Earth.

But empirical observation–the very soul of scientific method–has shown otherwise.  The Biblical world view prepares us for just such findings. When God finished His creation, “God saw all that He had made, and behold, it was very good” (Genesis 1:31). Do you think he would have judged a fragile system biased by unidirectional feedbacks toward destruction that way? No, He would not. Indeed, the global destruction of the Flood required His supernatural intervention (Genesis 6–8), after which He promised Himself, “I will never again curse the ground on account of man . . .; and I will never again destroy every living thing, as I have done. While the earth remains, seedtime and harvest, and cold and heat, and summer and winter, and day and night shall not cease” (Genesis 8:21–22)–the repeated pairs of opposites being the poetic device called merism, implying that God had committed Himself to ensuring that all the cycles needed for human (and other) thriving would continue.

Deltoid comments: "In other words, if climate sensitivity to the doubling of CO2 is 3 degrees, there is no God."  Hm, I think god may just test Beisner's faith -- isn't that what god does?   

My wife comments that her study of the bible shows that god has a long history of smiting societies run by idiots.  God may hate Republicans, which puts us all at risk. 

Update #1: to the extent that Beisner believes in god guaranteed self-regulation of the earth, there are lots of ways this could occur that are quite destructive to normal conceptions of human welfare, such as the plague and economic collapse.  Not to forget war.  Why does this god guaranteed self-regulation have to occur via non-human biological processes (all the extra plant growth) and not the decline of human civilization as punishment for bad stewardship over the earth?  Punishing societies that have deviated from god's plan isn't unheard of in the bible.  Or are we simply relying on the second coming to bail us out if necessary?  

Update #2: What's the deal with Beisner's claim that 

The IPCC exaggerates the rate of carbon buildup because it doesn’t recognize the capacity of Earth’s plants and oceans to absorb vast amounts of carbon from the atmosphere and turn it into the building blocks of life.

The IPCC spends lots of time discussing terrestrial carbon sinks (for instance Chapter 7.3.2 of the 2008 Summary), including plant growth, a difficult to measure and model phenomena with lots of heterogeneity across many dimensions.  I could see how Beisner might claim that the IPCC underestimates these carbon sinks, but how can he claim that the IPCC "doesn’t recognize" them? 

What about the claim, often mentioned by Republicans, that

Earth has been cooling for the last seven years at a rate of 3.5F per century.

Even taking the 3.5F per 100 years (i.e. 0.25F over seven years) as true, this does not look to me like a statistically significant deviation from the IPCC's trend warming projections given the variability of global surface temperatures.  For instance, here is the National Climatic Data Center's data on mean world surface temperatures (land and ocean -- it would be worthwhile to look into how these are constructed and sampling errors over time and space, for instance do better sampled locations get more weight?) as a deviation from the 1901-2000 average temperature for each month.  The statistical significance is even less that it appears, since there is, it seems, some positive autocorrelation in temperature even more than a year out, after taking out the trend.  And 3.5F per century sure isn't statistically different than 0F over a seven year period. 

 
Not clear to me what the basis for the claim that

atmospheric CO2 concentration is rising at a fraction of the rate forecast by the IPCC.

I've seen this claim before, but never with much documentation or citation of specific IPCC projections, the main claim being that CO2 concentrations seem to be growing linearly and not exponentially in the last decade or so.  And even if true, the interpretation Beisner puts on it seems odd. 

Tax Policy

via TaxVox:

S.857 : A bill to amend the Internal Revenue Code of 1986 to allow a $1,000 refundable credit for individuals who are bona fide volunteer members of volunteer firefighting and emergency medical service organizations.
Sponsor: Sen Schumer, Charles E. [NY] (introduced 4/22/2009) 

TaxVox writes:

Some of these provisions might have merit as tax policy, but the really noteworthy feature is that there are a lot of them, almost all would cost tax revenues, and some would take the tax system into brand new areas.  (Should the IRS run a cash grant program for volunteer firefighters and emergency medical workers?  Who will certify the bona fides for eligible recipients?  And is it still “volunteer” if you’re getting $1,000 from the feds to do it?)

Most, if not all, of these proposals are going nowhere.  Senator Schumer will probably get an award from the Association of Volunteer Firefighters for his support and that will be the end of it.  But wouldn’t it be great if members of congress applied as much creativity to making the tax system simpler, fairer, and capable of financing the government as they spend on finding new ways to undermine the tax base?

And what is the federal policy interest in promoting, at the extensive margin, volunteer firefighter and emergency service organization membership numbers?  I could see, maybe, funding a retention program for volunteers who are somehow judged valuable, or a training program, or a recruitment program.  But is a cash payment to all volunteers a good idea?    Why is this a federal interest? 

Larry Summers isn't getting much sleep

Why did interstate geographical mobility fall in 2005-2006?

The census has its latest geographical mobility figures out (via CR). 

The weird thing here is that interstate mobility falls already in April 2005 to March 2006 period (the data is from the March CPS survey). In particular, the data is 

April-March          interstate movers
2007-2008             1.6%
2006-2007             1.7%
2005-2006             2.0%
2004-2005             2.6%
2003-2004             2.6%
2002-2003             2.7%

This is a large fall from 2004-2005 to 2005-2006, with the 2005-2006 level of 2% lower than the previous post-WWII record low of 2.2%.  Note that this is before any big problems developed in the housing market.  Why is this???  Move rates look countercyclical, but with a good amount of lag.  Understanding the mechanism here would be interesting and what that mechanism means for the interpretation of the current move rate. 

Fernando Ferreira, Joseph Gyourko, and Joseph Tracy Housing Busts and Household Mobility argue that

Using two decades of American Housing Survey data from 1985-2005, we estimate the impact on household mobility of owners having negative equity in their homes and of rising mortgage interest rates. We find that both lead to lower, not higher, mobility rates over time. The impacts are economically large, with mobility being almost 50 percent lower for owners with negative equity in their homes. This does not imply that current worries about defaults and owners having to move from their homes are entirely misplaced. It does indicate that, in the past, the lock-in effects of these two factors were dominant over time. Our results cannot simply be extrapolated to the future, but policy makers should begin to consider the consequences of lock-in and reduced household mobility because they are quite different from those associated with default and higher mobility.

But this doesn't explain why 2005-2006 interstate mobility is so low, since negative housing equity is still relatively low and interest rates aren't high (though higher than in the previous years -- is this it?  For such a large drop in mobility?  It would be interesting to see the demographic breakdown of who moves and how it changes over time.

The Infallible Word of God vs. Cap-and-Trade

via Steve Benen the views of Rep. John Shimkus (R-Ill.):

Grand Social Theory

I'm not all at sure about these claims, but I did notice them. 

Matt Steinglass:

Excellent feature by Richard Oppel Jr. in the NYT on corruption in the Afghan police force. There’s a crucial telltale moment here:

“The corruption here is a bigger threat to a stable government than the Taliban,” said First Sgt. John Strain, the senior noncommissioned officer on the American unit training the Ghazni police.

“If we stay here another year, or another 50 years, I think it’ll probably only take two to three years after we are gone until it reverts to the way it was right before we got here,” he added.

Strain takes it for granted that the American presence is what’s preventing police corruption. That’s not true. The police are corrupt because they have no need to establish popular legitimacy, because the government they serve is propped up by foreign forces and sustained on foreign aid. It’s the same dynamic as South Vietnam. The Taliban, like the Viet Cong, are not corrupt because they need to build popular legitimacy to survive. The more US troops prop up the government, and the more American aid pours in, the more feckless and corrupt the government will become. The American presence isn’t reducing corruption in Afghanistan. It’s causing it.

Andrew Sullivan:

The assertion of total power through unchecked violence - outside the Constitution, beyond the reach of the law (apart from legal memos from hired hacks instructed to retroactively redefine torture into 'legality') - will be seen in retrospect as the key defining theory of Bush conservatism. It ended with torture. Why? Because reality may differ from ideology; and when it does, it is vital to create reality to support ideology. And so torture creates reality by coercing "facts" from broken bodies and minds.

This is how torture is always a fantastic temptation for those in power, even if they first use it out of what they think is necessity or good intentions: it provides a way for them to coerce reality into the shape they desire. This is also why it is so uniquely dangerous. Because it creates a closed circle of untruth, which is then used to justify more torture, which generates more "truth." This is the Imaginationland some of us have been so concerned about.

The Western anathema on torture began as a way to ensure the survival of truth.

I recall a really good article on the history of the right against self-incrimination, specifically in relationship to heresy investigations in Britain, but I cannot find it [is it The Substantive Origins of Criminal Procedure,William J. Stuntz; Yale Law Journal, Vol. 105, 1995?  I cannot find an online version.]. One point the article made was that creating a right against self-incrimination in Britain was a way of defanging heresy laws without actually revoking them, since (coerced) confessions were necessary for heresy convictions.  Which gets one back into the torture and truth context for religion and the relationship of criminal justice to religion/ideology. 

Longest Serving Weapons Platform in History?

With the delay in the next generation bomber program it looks like refurbished B-52s may be flying well into the 2030s, as has been expected for a while, or even later.  I believe this bomber is already the longest serving combat aircraft in history, with the first flight in 1952 and the currently serving B-52Hs built in 1961/62, making them 47 years old now. 

But no, there are others as well:

1) English Electric Canberra light bomber, first flight 1950, in service 1951, not clear when last produced, retired 2006 (still flown by Peru).  This aircraft had the first non-stop unrefuelled transatlantic crossing by a jet. The main bomber used on both sides in the Indian-Pakistan wars. 

The longest serving Canberra has a 1954 production date, with a final stint doing recon over Afghanistan in 2006 before retirement. No bomber role since 1970 in the RAF. The squadron now flies Predator and Reaper UAVs. 

So the current batch of B-52 isn't quite there yet, having to make it to 2013 to match the Canberra's record. 

2) the USAF's oldest KC-135 tanker is from 1955, for a current age of 53.  This may be the record for current inventory air force planes. 

3) the Russian Tu-95 bomber had its first flight in 1952, but the current Russian inventory is from 1980s and 1990s production runs, in a recon configuration.  Most well known for its current (?) naval aviation role.  Not clear when last employed as a bomber. 

4) the oldest C-130 retired in 2008 was produced in 1961.  

So the B-52H seems to be the oldest flying weapons platform in history, since the Canberra didn't serve that long as a bomber. 

The longest serving US Navy ship ever, the Kitty Hawk, retired this year after 48 years of service (1960-2009, laid down 1956). 

Fake Aniquities and Looting

Tyler Cowen posts on a cool effect of counterfeiting:

Our greatest fear was that the Internet would democratize antiquities trafficking and lead to widespread looting. This seemed a logical outcome of a system in which anyone could open up an eBay site and sell artifacts dug up by locals anywhere in the world. We feared that an unorganized but massive looting campaign was about to begin...But a very curious thing has happened. It appears that electronic buying and selling has actually hurt the antiquities trade.

...many of the primary "producers" of the objects have shifted from looting sites to faking antiquities. I've been tracking eBay antiquities for years now, and from what I can tell, this shift began around 2000, about five years after eBay was established.  ...Today, every grade and kind of antiquity is being mass-produced and sold in quantities too large to imagine.

...Because the eBay phenomenon has substantially reduced total costs by eliminating middlemen, brick-and-mortar stores, high-priced dealers, and other marginal expenses, the local eBayers and craftsmen can make more money cranking out cheap fakes than they can by spending days or weeks digging around looking for the real thing. It is true that many former and potential looters lack the skills to make their own artifacts. But the value of their illicit digging decreases every time someone buys a "genuine" Moche pot for $35, plus shipping and handling. In other words, because the low-end antiquities market has been flooded with fakes that people buy for a fraction of what a genuine object would cost, the value of the real artifacts has gone down as well, making old-fashioned looting less lucrative.

Counterparty valuation adjustments

I've wondered about this issue before, not clear to me how to think about it, though I'm pretty sure there are are one or more correct ways (see for instance here).  CVA is credit value adjustment, i.e. an adjustment due to the estimate that the counterparty (or you yourself in this case) will not pay.  See also Holding to Account. 

Krugman writes:

So the accounting rules say that a decline in the market value of a bank’s debt thanks to increased credit default swap spreads — that is, because investors think you’re more likely to fail — counts as a a profit. On the other hand, if your bank looks stronger, the spreads fall, and you book a loss.

FT Alphaville has the story. Citigroup reported

A net $2.5 billion positive CVA on derivative positions, excluding monolines, mainly due to the widening of Citi’s CDS spreads

while Morgan Stanley reported

Morgan Stanley would have been profitable this quarter if not for the dramatic improvement in our credit spreads - which is a significant positive development, but had a near-term negative impact on our revenues.

So Citigroup is profitable because investors think it’s failing, while Morgan Stanley is losing money because investors think it will survive. I am not making this up.

The NYT also reports:

One of the maneuvers, widely used since the financial crisis erupted last spring, involves the way Citigroup accounted for a decline in the value of its own debt, a move known as a credit value adjustment. The strategy added $2.7 billion to the company’s bottom line during the quarter, a figure that dwarfed Citigroup’s reported net income. Here is how it worked:

Citigroup’s debt has lost value in the bond market because of concerns about the company’s financial health. But under accounting rules, Citigroup was allowed to book a one-time gain approximately equivalent to that decline because, in theory, it could buy back its debt cheaply in the open market. Citigroup did not actually do that, however.

“It’s junk income,” said Jack T. Ciesielski, the publisher of an accounting advisory service. “They are making more money from being a lousy credit than from extending loans to good credits.”

Edward J. Kelly, Citigroup’s financial chief, defended the practice of valuing its bonds at market prices, since it values other investments the same way. The number fluctuates from quarter to quarter. For instance, Citigroup recorded a big loss in the fourth quarter of last year, when the prices of its bonds bounced back.

“I think it is unfair to focus on it in isolation rather than considering it with all the factors,” Mr. Kelly said.

Other banks have taken a similar approach. Bear Stearns, now absorbed into JPMorgan Chase, and Lehman Brothers, which plunged into bankruptcy last autumn, took advantage of credit value adjustments as their bonds lost value last year, as did Goldman Sachs.

JPMorgan, which reported strong results on Thursday, added $638 million to its first-quarter profit by availing itself of this adjustment. Bank of America and other large financial companies are expected to take similar steps when they report their results.

A similar issue shows up when mortgage write-downs are counted as mortgagor income for tax purposes.  Cannot pay your $400K mortgage and it gets written down to $300K?  You need to pay income tax on that $100K.    Which is a very sensible rule in most cases, though currently waived, since everybody would otherwise get paid tax free in loans that later get written down.  The big issue here seems to be, besides consistency with other accounting practices, what the timing of the income is: can you could non-payment as income before the non-payment occurs, i.e. does the change in the value of the anticipated non-payment count as current income? 

Update #1: well, thinking about this issue while driving my kids around, it seems that the problem here is that the accounting rules are remarking liabilities but not the change in asset value that is driving the change in liability value.  For example, assume a company with a project worth 200 has 100 bonds outstanding and 100 equities, both at par.  Then the project is reassessed by the market to be worth 200 with probability 0.5 and 50 with probability 50.  In that case, equity only gets paid 100 with probability 0.5 and is worth 50, and debt gets paid 100 with prob. 0.5 and 50 with prob. 0.5, for a value of 75.  With CVA the firm is making 25 in profit due to the lower value of its debt, due to defaulting on its debt with prob. 0.5.  Which is fine as far as it goes, but note that the accounting doesn't pick up the firms loss of 75 on the project, which is shared between debt, with a loss of 25,  and equity, with a loss of 50.  True profits by equity are -75 (from the project loss) and 25 (from the transfer from debt), for a total of -50 (exactly the loss in equity value). 

So the problematic feature here is marking the liability side to market but not marking the asset side to market, even though larger movements in asset side values are driving the liability side valuation adjustments. 

Belief in the Second Coming of Christ

from Pew --- what about the 21% of Christians who don't know or don't believe?  Is this a Christianity without a Second Coming or a non-believing (social?) Christianity?   Which large organized Christian groups hold this view? It is a bit hard to figure out what Unitarians are supposed to believe, but as the Christian denominations I'd join if I'd had to join one, it is not too surprising to find something along the lines of

We do not await or expect the second coming of Christ to bring about the world of our dreams. We do not rely on the miraculous intervention of God. To the extent that God works in the world, it must be through humanity. The only hands that God has are ours, our hands.

Here is the Pew poll:

More Evil Deer

"Zusätzliche Belastungen für den Steuerzahler werde es nicht geben"

The FAZ reports:

Bis Mitte Mai will die Bundesregierung beschließen, wie sie die Banken von „toxischen“ Papieren befreien will. Wie Bundesfinanzminister Steinbrück (SPD) nach einem Spitzentreffen der Regierung am Dienstag berichtete, werden noch zwei Modelle geprüft: So könnten sämtliche Risikopapiere sofort mit ihren Buchwerten in eine Zweckgesellschaft überführt werden. Die „giftigen Wertpapiere“ könnten aber auch vor einer Auslagerung aus den Bankbilanzen zunächst von Fachleuten bewertet werden. Das sei aber schwierig.

Zusätzliche Belastungen für den Steuerzahler werde es nicht geben, hob Steinbrück hervor. Der Bund übernehme keine Haftung, es gebe keine Auswirkung auf den Haushalt. Der Bund übernehme nur eine Garantie für Defizite, die am Ende übrig bleiben könnten. Die Rede ist von einem Zeitraum von zehn bis zwanzig Jahren.

This may be a good plan, but seems like a ridiculous way to sell it. There must be some rule that forces costs (i.e. Belastungen) only to be accounted for within a fixed horizon, in this case ten years, with later payments not counting (even thought they are authorized), with additionally no need to value guarantees fairly.  What's the rule for Germany? 

Investment Positions for US States?

We have -- not always fully reliable -- international investment positions (IIP) for countries, for instance the BEA's US version, but is there any state investment position for US states?  The construction of US state investment positions would have to be based on different data than international investment positions since reporting requirements are quite different for domestic and international transactions.  For instance, once could try to infer something from the Survey of Consumer Finances (SCF) by looking at household wealth by state.  It would be interesting to see how per capita income sources and wealth holdings differ by state.  There is a history of plain states feeling oppressed by eastern financiers in the late 19th century -- how do these relative wealth differences and indebtedness play out today? 

There are also life-cycle issues here, for instance high wealth older people moving to low cost and low income states (at least in the past Florida, Arizona) once they earned their money in high cost and high income states in the Northeast. 

Update #1: KARL E. CASE, JOHN M. QUIGLEY and ROBERT J. SHILLER, COMPARING WEALTH EFFECTS: THE STOCK MARKET VS. THE HOUSING MARKET seems to use data from non-public parts of the Investment Company Institute database and the SCF.  

The Temperate Tropical Highlands

Well, I'm not finding a good high resolution climate map or maps to link to...basic point is that these places seem interesting for a variety of reasons, both ecologically and for human history. 

Dermacentor variabilis (Dog or Wood Tick)

My wife pulled this tick off kid #3 this morning, leaving the confirmation of her ID of it as a wood tick to me.  Yes, it does look like Dermacentor variabilis.  My wife took it off with a hot extinguished match head, used tweezers to pull out the rest, and put antibiotic ointment on the bite.  Not known to transmit Lyme Disease, but can carry other diseases.  (Shot with a point-ant-shoot with a macro setting with a dime for size) 

Atheist/Jewish Materialism vs. the Catholic Spiritual-Ethical View

I've been obsessing a bit about the current Catholic Church's attack on atheists.  My current state of mind is:

1. The Catholic Church ought to extend its ecumenical process to cover atheists as well, if it hasn't already done so.  The Church's current stance seems driven by caricature and distortion to an extent that isn't generally acceptable in ecumenical relations.  The Church ought to review how it is handling this matter to come up with a more truthful stance that lives up the the Church's aspirations.

2.  It strikes me that the Church's stance on atheism and atheists is reproducing some of the features of Catholic and also Protestant antisemitism in the 19th and first half of the 20th century.  While before 1945 German Christians could get worked up about Jewish Bolshevism as opposed to just Bolshevism, and then use this association to go after all Jews (or at least the annoying ones) in Germany, we now have the Catholic Church talking about atheist Communism and atheist Nationalsocialism, to use this against all atheists (or at least the vocal ones) in Germany.  As for the strengths of the association the Church is constructing here, the association between Communism and Jews is at least as strong as the association between atheists and Nazis (i.e. very partial: some Jews became Communists and Communism was much stronger in their lives than Jewish religious heritage, and most Communists were not Jews, similarly most Nazis were not atheists and those that were atheists were most shaped by Nazism and not atheism). The motives for the Churches and social elites for adopting this constructions of Jews appears in part to be the creation of polarization against a perceived enemy, to better create internal cohesion in the face of a changing environment and internal dissidents ('nationale Sammlungspolitik' before 1945), presenting reaction as the only possible response to social change, not one of many options (i.e. taking socialism and liberalism, both seemingly  compatible with non-reactionary versions of Christianity,  off the table). 

The contrasts drawn between Jews and Christians or Atheists and Christians are very similar, to the extent that I can tell from my limited exposure.  On the one side Jewish materialism or atheist materialism, on the other side the Christian spiritual-ethical world of love, creation and salvation by the one true god.  On the one side Jewish rule-bound clannish materialism or atheist scientistic materialism vs. Christian spiritual universal love.  We also have the contrast between the cosmopolitan Jew or atheist vs. the deeply rooted man with his local organic and necessarily Christian culture.  It would be nice to look into the exact parallels and differences in how these constructions work and where they come from, but it would take some actual reading to do so.  Paul Lagarde seems to be one of the leading lights for these constructions that were picked up widely in the second half of the 19th century.  

3. 19th and 20th century Antisemitism was explicitly conceived as a protest against social change perceived as imposed from the outside on communities and the Jews who took advantage this change to give themselves upward social and economic mobility and access to the public sphere (journalism, science and academia).   Current Catholic anti-atheism seems similarly conceived, as a protest against unjust and externally imposed capitalist and unethical change and the people who defend and promote it, as well as use these changes for upward social and economic mobility and access to the public sphere (journalism, science and academia). 

4. I'm not claiming that the Catholic Church has a history and doctrinal base that necessarily requires it to construct these distorted demonizations of Jews and atheists, but it is a possible construction the Church seems open to.  The Church could go elsewhere as well, I hope.  It might be worth giving it a try, though it might take more work to tread new ground that to rehash the past under a new heading. 

This post clearly needs more work, in particular trying to figure out more what is true beside just being plausible, but I thought I'd put it up.  One final issue: the fact that Christian and German antisemitism ended in a ethical and political disaster for Germany isn't an argument the the Church got its antisemitism fundamentally wrong, it could instead be that only elements malfunctioned in unforeseen circumstances, but that the strategy is actually superior to others available to the Church.  Nor does the analogy I construct above between the structure of antisemitism and anti-atheism, in itself, prove anything about the Church's anti-atheism.  Instead, this is all just a pointer to where to look further. 

The Zentrum Party and the NSDAP

Not that I'm going to write it up now, but Mixa's Easter sermon did inspire me to read around a bit about the Zentrum party in the 1928-33 period, though I'd like to read more.  The party faced a significantly challenging environment, but in terms of how things came out they don't look good, with a turn in a clerical right wing direction by 1928, before the Great Depression, and a tendency towards 'Nationale Sammlungspolitik' in concert with the NSDAP as the other large non-socialist party and a refusal to work with less strong bourgois parties against the NSDAP when push came to shove.  Anti-communism, anti-liberalism and anti-atheism ('Sittlichkeit' and all that, a Volksempfinden shared with large parts of the NSDAP is seems, phrased as anti-Jewish materialism in both cases) the desire to preserve and secure the Church's organizational powers, especially its presence in public schools, came far above support for a failing electoral democracy or a desire to keep the NSDAP out of power by non-democratic means.  At the same time the Church was very aware that the NSDAP was deeply problematic and pronounced bans on Catholics becoming members of the Party, but gave up on this stance and blessed the new order in 1933.  So we have complicity and compromise in the face of a good awareness of evil. 

I can see why things came out this way, but it is deeply ironic to be then subjected to Easter sermons about how the Catholic Church is the foundation for ethical choice while atheists are doomed to evil and error. 

And then there are the post-WWII ratlines to help seemingly bad parts of the Nazi regime establish new identities, run by Catholic clergy pretty openly doing this job.   It would be nice to know more, especially about how these clergy and the Church saw their role and purpose here.  This includes enough people that it is more than a few exceptions, for instance:

• Adolf Eichmann
• Franz Stangl
• Gustav Wagner
• Erich Priebke
• Klaus Barbie
• Edward Roschmann
• Aribert Heim
• Andrija Artuković
• Ante Pavelić
• Walter Rauff
• Alois Brunner
• Josef Mengele

Also it appears lots of connections between Rom and fascists remnants in Croatia. 

Again, I can see how these things happen -- running the Catholic Church in Europe 1914-50 is a hard and difficult job --, but they ought to develop a better story line about what happened than what Mixa is propagating.  This sort of thing makes me wounder how the Church learns, or fails to learn, from its history. 

What to Make of This?

Last week Matthew Yglesias, who I generally like, posted

I was saying that whatever one thought should be done with large financial institutions as a policy matter, surely we could agree that the executives at these institutions are primarily bad people. It turns out we couldn’t agree on that. But my argument is pretty simple. These are people primarily motivated in life by greed.

Then this week

as a society we’ve become accustomed to the idea that when empirical evidence seems to contradict basic economic theory—as when the United States experienced rapid economic growth under conditions of widespread unionization and a high minimum wage—that we ought to accept the theory as true. This, again, is usually a claim you hear being made by economists, but its social prestige ultimately is a kind of idea in epistemology or the philosophy of science. And all this, of course, is to say nothing of the specific influence of particular empirical claims in economics which hold that high levels of taxation and government spending are everywhere and always economically destructive.

US Representative doesn't understand the EU or its history

Since I'm in a ranting mode, here's a story on NPR just now:

President Obama lifted restrictions on travel and sending money to Cuba on Monday, but not everyone is happy with the move.

Reps. Lincoln Diaz-Balart and Mario Diaz-Balart, Cuban-American brothers who represent Miami in Congress, issued a joint statement Monday calling it "a serious mistake." ....

"The people need freedom," [Lincoln] Diaz-Balart tells NPR's Robert Siegel. "And just like the European Union — at that time called the Common Market — told Spain during its 40 years of Franco, Portugal during its 50 years of Oliveira Salazar: 'You cannot be a part of Europe until you're democracies,' we say Cuba will not have access to the billions of dollars in the U.S. market until it's a democracy. And it's very important for that kind of international solidarity."

Ahm, I'm pretty sure the EEC allowed remittances and travel to Spain and Portugal before 1975.  Where did Lincoln Diaz-Balart pick up this analogy?  Using EEC policy towards Spain and Portugal as a model for how to deal with Cuba would suggest pretty rapid liberalization of remittances, immigration and travel. 

And though for some bizarre reason NPR doesn't mention it, the Diaz-Balart brothers are Republican. 

Ah, we here are, lots of movement before democratization in Spain in 1975:

Portugal entered trade talks with the EEC in 1970 and reached a trade treaty in 1972, again before democratization in 1974/75. And Portugal is a founding member of NATO, so it didn't exactly lack political integration with the West. 

On reflection, I assume Lincoln Diaz-Balart is just being fundamentally disingenuous here and having a little fun, due to some sort resentment at the EU or Spain for its Cuba policy, or the EEC's policy toward Franco's Spain. 

Finally, this may be an example of Truth vs. Plausibility: Arguing in Public. 

Atheism in Europe

When the Catholic Church goes after atheism as evil (see Mixa below or Mueller, what appears to be a widespread talking point in the Catholic Church right now), it is no longer going after a small minority.  For instance, from a 2005 Eurobarometer poll, showing believers in god are now a minority in Germany, with 25% not believing in god, with the rest believing in non-Christian god-like forces or refusing the take a stance.  Again, it would be nice to break out West and East Germany.  There are strong age, sex and education gradients in Europe overall, with more young, male and educated atheists, so atheists may now even outnumber theists among the young and educated in Germany (but it would be nice to see the crosstabs for Germany).  So it looks like the Catholic Church may face a losing struggle to in maintaining that Germany is a Christian country with entrenched privileges for the large Christian churches and what most people understand as a fundamentally Christian culture (as opposed to say a post-Christian culture). 

For context, here is Bischof Dr. Gerhard L. Müller trying to claim Germany is a necessarily Christian nation (which suggests why Muslims building mosques is seen as so scary by some):

Unsere Kultur ist eine christliche Kultur. Sie ist aus den Tiefen der Geschichte, aus den christlichen Grundüberzeugungen heraus gewachsen und lebendig in unserer Gegenwart. Unsere Kultur ist nicht eine Zivilisation, die von Technokraten am Reißbrett entworfen worden ist, sondern wir verdanken uns einer geschichtlichen Herkunft und sind durch unsere Vorfahren, ihr Tun, ihre Verkündigung und ihr gelebtes Zeugnis mit unseren Wurzeln verbunden.

Das Christentum in unserem Kulturraum besteht – das ist historisch nachgewiesen – seit dem 3. und 4. Jahrhundert. Die römische Festung Castra Regina, Regensburg, hat über Kaufleute und Soldaten das Christentum aus dem Mittelmeerraum empfangen. Nach dem Zusammenbruch des römischen Reiches ist der christliche Glaube in unserer Heimat aber nicht erloschen. Vielmehr ist er durch große Missionsbischöfe aus der schottischen und angelsächsischen Mission ganz neu in unserer Gegend aufgeblüht – bis hin zur kanonischen Gründung unseres Bistums im Jahre 739 durch den heiligen Bonifatius. So ist unser christlicher Glaube gewachsen und hat die gesamte Kultur geprägt und geformt.

„Kultur“ leitet sich vom lateinischen Verb „colere“ ab, das soviel bedeutet wie „bebauen“. Wir erinnern uns an die symbolisch zu verstehenden, aber als wahr auszulegenden Worte der Hl. Schrift, wo Gott den Menschen am Morgen der Schöpfung in einen Garten hineinsetzt und ihn beauftragt, diesen Garten zu bebauen, zu hegen und zu pflegen (vgl. Gen 2). „Bebauen“ – dieses Wort bezieht sich zuerst auf den Ackerbau. Es beinhaltet meist mühsame Arbeit, damit dem oft so kargen Boden – wie er gerade auch bei uns ist – etwas abgerungen werden kann. „Bauen“ ist aber auch noch tiefer zu verstehen: Gemeint ist das Bauen von schönen Häusern, die Pflege der Landschaft und ähnliches. Wenn man heute morgen von Regensburg hierher nach Tirschenreuth fährt, dann sieht man wie herrlich diese Landschaft ist! Wie die Wälder und Felder wachsen, wie sie blühen, wie das Grün und die leuchtenden Farben der Blumen unser Herz erfreuen. Überall in den Ortschaften steht in der Mitte eine wunderschöne Kirche! Man hört die Kirchenglocken grüßen, wenn man aus dem Auto aussteigt und einen kurzen Weg in den Wald hineingeht. Von überall her klingt es, ist es prächtig und schön. Das alles ist der Ausdruck unserer christlichen Kultur. Die Menschen, die hier ihre Heimat fanden und Wurzeln geschlagen haben, sind sich bewusst, dass sie diese Synthese aus Natur, Kultur und Glauben letztlich dem Wirken Gottes verdanken.

Update #1: Malta, the country with the most religious population in the Europe, still has this in its constitution, Article 2:

(1) The religion of Malta is the Roman Catholic Apostolic

Religion.

(2) The authorities of the Roman Catholic Apostolic Church

have the duty and the right to teach which principles are right and

which are wrong.

(3) Religious teaching of the Roman Catholic Apostolic Faith

shall be provided in all State schools as part of compulsory

education.

"Eine Gesellschaft ohne Gott ist die Hölle auf Erden"

Die Welt reports on bishop Walter Mixa's -- chief Catholic Priest of the Bundeswehr -- Easter sermon:

Der Augsburger Bischof Walter Mixa hat vor einem zunehmend aggressiven Atheismus in Deutschland gewarnt. "Wo Gott geleugnet oder bekämpft wird, da wird bald auch der Mensch und seine Würde geleugnet und missachtet. Eine Gesellschaft ohne Gott ist die Hölle auf Erden", sagte der Militärbischof in seiner Osterpredigt in der Augsburger Marienkathedrale.

Atheisten versuchten die Realität der Auferstehung von den Toten und der Erlösung vom Bösen in das Reich der Mythen und der Fantasie zu schieben. Wer aber dem Menschen den Glauben an Gott nehme, nehme ihm das Wichtigste im Leben, sagte Mixa. Wer den Glauben an den menschgewordenen, am Kreuz gestorbenen und von den Toten auferstandenen Christus leugne, wende sich letztlich gegen das Heil des Menschen.

"Die Unmenschlichkeit des praktizierten Atheismus haben im vergangenen Jahrhundert die gottlosen Regime des Nationalsozialismus und des Kommunismus mit ihren Straflagern, ihrer Geheimpolizei und ihren Massenmorden in grausamer Weise bewiesen", sagte der Augsburger Bischof. Immer seien in diesen Systemen die Christen und die Kirche besonders verfolgt worden.

Auch in der Gegenwart würden durch gottlose Verhaltensweisen in allen Teilen der Welt Menschen wirtschaftlich und moralisch ausgebeutet, wenn etwa Kinder zum Kriegsdienst oder Frauen zur Prostitution gezwungen würden, wenn gerechter Lohn verweigert werde oder Menschen an Hunger sterben müssten. Ohne christlichen Glauben gebe es dauerhaft keine wahre Menschlichkeit, sagte Mixa.

Also

„Ohne Gott ist alles erlaubt“, zitierte Mixa den russischen Dichter Dostojewski. Wo der christliche Glaube schwinde, komme deshalb nicht das „helle Licht irgendeiner fröhlichen Aufklärung“ zum Vorschein.

I'm never sure what to make of stuff like this.  At some level you'd expect the Catholic Church to claim that all atheists are inherently and essentially extremely evil, but still...it does raise the question about what one should do when an institution and its leaders, even or especially if it is because they are confused about how the world works, put you on their enemy list. 

Finally, to be picky (and I'd be happier if I had the full text of the sermon, not just press accounts), what's the deal with 

Immer seien in [den gottlosen Regimen des Nationalsozialismus und des Kommunismus] die Christen und die Kirche besonders verfolgt worden.

What special persecution of Christians as Christians and the Church is Mixa talking about?  I can see incidental persecution of Christians and a general suppression of the autonomy of large non-Party organizations, but 'special' persecution of the Church?  How about the special persecution of the Handwerksverbaende?  I'm sure parts of their leadership were taken down as well. Indeed, the Third Reich seems to have carved out a special zone of autonomy and cooperation with the two main Christan churches, more so than for any other non-Party organizations. 

And since Mixa cannot claim Hitler was a philosophical atheist -- a bad and fallen Catholic maybe, or a charismatic leader of a new form of religion, but that doesn't amount to philosophical atheism--,   Mixa calls Hitler a 'practicing atheist' despite the fact that the appeals in Nazi Germany to faithless rationalism were, well, limited.  Nor is there isn't any evidence I'm aware of that Hitler denied, as Mixa puts it, 

den Glauben an den menschgewordenen, am Kreuz gestorbenen und von den Toten auferstandenen Christus leugnete.  

though there are pretty strong indications that Hitler didn't like what the Catholic Church made of Jesus. Hitler doesn't deny Jesus' divinity, he was going to take it away from the Catholic Church.  But he did not get there by 1945. The vast majority of Nazis were Christians in the two main German Churches and never considered themselves atheists, philosophical or practical. 

Dealing with fascism wasn't the Catholic Churches most glorious hour -- which doesn't make the Church particularly bad compared to other organizations, but it seems odd to try to claim a special heroic victim role here. In 1933 fascism does appear to be seen by the Catholic Church as less of a threat than communism and less bad than the now apparently vanquished liberalism.   In 1933 the Catholic Zentrum party in the Reichstag voted 72 out of 74 for the Ermächtigungsgesetz, providing the biggest pro-Hitler voting block after the NSDAP and a sufficiently large voting block to have voted down the law, with Zentrum suspicion about the NSDAP and Hitler in part overcome by sympathy for their anti-communist actions and in part by promises of Church autonomy in the new regime, as well as a recognition of the new power realities in Germany.  Indeed, I'd not be totally surprised if even by the late 1930s many high level Catholic functionaries still thought of godless liberalism and communism, not fascism, as the main enemy of faith, though by 1937 Hitler seems to be setting off the Church's alarm bells quite strongly, especially as a result of Catholics leaving the Church in Germany, but this is not due to the abolition of democracy in 1933 but rather due to the radicalization of nationalism and the threat this posed the supranational Church in subsequent years. Some more evidence would be nice, but that's my sense of it.   And what was the Church's stance on Franco's Spain?  From all that I know the Church only started complaining about the lack of political parties or lack of electoral democracy after Vatican II. 

See the 1937 Pius XI.'s  Enzyklika Mit brennender Sorge for the Church's complaints at the time.  (Englich version)  The Church does seem quite alarmed by the movement to bring German Catholics into a 'positive German Christianity' beyond Rome. 

To finish, when did electoral democracy become something the Catholic Church deems obligatory or which the Church strongly suggests?   Or does it depend on circumstances -- which would be an understandable view? 

Shorter Mixa: vote for Hitler as a deeply problematic but necessary ally in the struggle against atheist communism in 1933 and then complain about how atheists caused the Nazi problem. I can see how the Catholic Church would support a vote for Hitler in 1933, but don't turn around and then blame me for it. 

Update #1: why not quote Hitler's speech on March 24, 1033, on the passage of the Ermächtigungsgesetz:

Gleichlaufend mit dieser politischen Entgiftung unseres öffentlichen Lebens wird die Reichsregierung eine durchgreifende moralische Sanierung des Volkskörpers vornehmen. Das gesamte Erziehungswesen, Theater, Film, Literatur, Presse, Rundfunk, sie werden alle Mittel zu diesem Zweck sein und demgemäß gewürdigt. Sie haben alle der Erhaltung der im Wesen unseres Volkstums lebenden Ewigkeitswerte zu dienen. Die Kunst wird stets Ausdruck und Spiegel der Sehnsucht und der Wirklichkeit einer Zeit sein. Die weltbürgerliche Beschaulichkeit ist im raschen Entschwinden begriffen. Der Heroismus erhebt sich leidenschaftlich als kommender Gestalter und Führer politischer Schicksale. Es ist Aufgabe der Kunst, Ausdruck dieses bestimmenden Zeitgeistes zu sein. Blut und Rasse werden wieder zur Quelle der künstlerischen Intuition werden. Es ist Aufgabe der Regierung, dafür zu sorgen, daß gerade in einer Zeit beschränkter politischer Macht der innere Lebenswert und der Lebenswille der Nation einen um so gewaltigeren kulturellen Ausdruck finden. Dieser Entschluss verpflichtet zur dankbaren Bewunderung unserer großen Vergangenheit. Auf allen Gebieten unseres geschichtlichen und kulturellen Lebens muss die Brücke von dieser Vergangenheit zur Zukunft geschlagen werden. Die Ehrfurcht vor den großen Männern muss der deutschen Jugend wieder als heiliges Vermächtnis eingeprägt werden. Indem die Regierung entschlossen ist, die politische und moralische Entgiftung unseres öffentlichen Lebens vorzunehmen, schafft und sichert sie die Voraussetzungen für eine wirklich tiefe Einkehr religiösen Lebens. 

Die Vorteile personal-politischer Art, die sich aus Kompromissen mit atheistischen Organisationen ergeben mögen, wiegen nicht annähernd die Folgen auf, die in der Zerstörung allgemeiner sittlicher Grundwerte sichtbar werden. 

Die nationale Regierung sieht in den beiden christlichen Konfessionen die wichtigsten Faktoren zur Erhaltung unseres Volkstums. Sie wird die zwischen ihnen und den Ländern abgeschlossenen Verträge respektieren. Ihre Rechte sollen nicht angetastet werden. Sie erwartet aber und hofft, dass die Arbeit an der nationalen und sittlichen Erneuerung unseres Volkes, die sich die Regierung zur Aufgabe gestellt hat, umgekehrt die gleiche Würdigung erfährt. Sie wird allen anderen Konfessionen in objektiver Gerechtigkeit gegenübertreten. Sie kann aber nicht dulden, dass die Zugehörigkeit zu einer bestimmten Konfession oder einer bestimmten Rasse eine Entbindung von allgemeinen gesetzlichen Verpflichtungen sein könnte oder gar ein Freibrief für straflose Begehung oder Tolerierung von Verbrechen. Die Sorge der Regierung gilt dem aufrichtigen Zusammenleben zwischen Kirche und Staat; der Kampf gegen eine materialistische Weltanschauung, für eine wirkliche Volksgemeinschaft dient ebenso den Interessen der deutschen Nation wie dem Wohl unseres christlichen Glaubens.

Hitler sounds more in concert with Mixa than with materialist atheists to me. 

Update #2: I googled to see reactions to Mixa's speech, and the response is pretty close to 100% negative.  There are potential supporters out there who just post the news report of the speech without comment, but I didn't see any support. 

I do see the comment that Mixa claiming that

Atheisten versuchten die Realität der Auferstehung von den Toten und der Erlösung vom Bösen in das Reich der Mythen und der Fantasie zu schieben.  Wer den Glauben an den menschgewordenen, am Kreuz gestorbenen und von den Toten auferstandenen Christus leugne, wende sich letztlich gegen das Heil des Menschen.

is somewhat anti-semetic and anti-Muslim as well, not just anti-atheist, since Judaism and Islam deny the resurrection of Christ (though not the coming resurrection with the Day of Judgment) as well. 

This whole episode reminds me of the view that institutions seeking the one and only way to human salvation or "das Heil des Menschen" are a dangerous and potentially totalitarian project, be they Nazi, Soviet or Christian. I'm up for institutions trying to solve human problems while leaving dubious 'this way is the only way' salvation projects to the private realm. 

To close, one of those aggressively atheist cartoons:

No major glacial cycle extinctions before the Late Quaternary Extinctions?

S. Kathleen Lyons, Felisa A. Smith and James H. Brown, Of mice, mastodons and men: human-mediated extinctions on four continents, Evolutionary Ecology Research, 2004 write:

There were more than 20 glacial–interglacial cycles during the ∼1.6 million years of the Pleistocene, but only in the last one, and only in North and South America, were these climatic changes associated with wholesale extinctions of large mammals.

Lyons et. al. don't, as far as I can tell, cite a source for this claim.  They do recognize that there are lots of debates about climate change and extinctions of large animals outside of the Americas, especially in Northern Eurasia and Australia, so in part what is important here is what 'wholesale' means and how close other glacial cycles and other locations come to 'wholesale' extinctions of large animals.  My gut instinct from reading a bit of this literature is that humans are the main cause of large animal extinctions in the 50,000 - 8,000 BP period, with the lack of these types of mass extinctions in prior glacial cycles and far fewer extinctions in Africa (where modern humans originated and coevolved with large animals) the most suggestive evidence, but it would be nice to know the extent that this suggestive line of evidence is actually true. 

Update #1: the standard reference seems to be Alroy J. 1999, 'Putting North America’s end-Pleistocene megafaunal extinction incontext: large-scale analyses of spatial patterns, extinction rates, and size distributions', but I cannot get it online [ah here it is, but not as a pdf and not complete].  Paul L. Koch and Anthony D. Barnosky, Late Quaternary Extinctions: State of the Debate, 2006, summarize Alroy as

[R]recent analyses that account for temporal and sampling biases in the fossil record recognize a LQE spike that exceeds all but one other extinction in the past 55 million years (Alroy 1999). Even taking into account that larger animals are preferentially impacted by extinction events, and that smaller species are increasingly affected as extinction intensity rises, by Alroy’s metrics the LQE appears more selective than any extinction event in the preceding 65 million years of mammalian history in North America.

Not clear what that one larger extinction in the past 55 million years is, or even what the extinction event 55 million years ago is. The Eocene-Oligocene transition is the obvious candidate -- indeed, it would be very noteworthy if the  LQEs are similar in size to the ones associated with one of the major climate changes (the glaciation of the Antarctic for the first time in more than 100 million years to an ice volume above where it is now, along with a fall in tropical mean temperatures of more than 4C, more likely 8C or more, a larger fall in non-tropical temperatures and a major increase in seasonality -- basically the transition from a still Cretaceous-like climate to today's basic climate structure) in the geological record. 

So yes, the LQEs do sound like they are the one major extinction even in 1.6 million years of glacial cycles.  Still, it would be nice to see the numbers (corrected for sampling biases). 

Finally, from Koch and Barnosky the size dependency of the LQEs by animal size and location:

Photography Lesson Learned

Well, looking back at my Easter photos, I'm not again going to shoot many flash photos using ISO 800, instead I'll choose ISO 400 or 200.  I tried shooting ISO 800 since my wife objects to strong bright flash, but the increased noise and grain and associated loss of sharpness from using ISO 800 compared to ISO 400 just doesn't make it worthwhile.  Instead I'd rather shoot with the lens more wide open and just accept the loss of depth of field. 

One thing I don't understand is why ISO 800 for flash is too noisy and grainy, while ISO 800 in no-flash situations is quite good and even ISO 1600 seems better in non-flash situations than ISO 800 with flash.  ISO 3200 non-flash seems about as good or only slightly worth than ISO 800 with flash.  Why is this?  Does shooting ISO 800 at 1/80s much less noisy than shooting ISO 800 at 1/200s?  What's going on here?

Maybe ETTL is just underexposing for some reason at ISO 800 but not at ISO 400, or the underexposure ETTL chooses doesn't matter as much with ISO 400.  Indeed, this is probably it: ISO 800 would be fine if I dial up flash exposure compensation (FEC) a bit.  So why is ETTL underexposing?     Ah, it seems to be a known issue, to be solved by dialing up FEC or making other changes. So ISO 800 with flash might be fine, with exposure or FEC turned up to make sure there isn't too much noise without, at the same time, blowing out highlights. 

Oregon Unemployment Rate at post-WWII high

The Oregon unemployment rate hit 12.1% in March, matching its post-WWII high in November 1982, according to the state of Oregon.  The trend appears to be up.  (via CR)
Here is a graph of the situation in January, when the unemployment rate was still 9.9%.  We've now crossed the red line representing the early 1980s. 

Update #1: David comments:

Hey, California is worse, right?
Maybe they should start logging again? Just kidding!

California has a lower unemployment rate than Oregon as far as I can tell.  BLS lists Oregon at 10.8% for February, California at 10.5%.  Only South Carolina at 11% and Michigan at 12% have higher unemployment rates than Oregon in February. 

Targeting Child Support by Parent Quality

The FAZ has an article that raises an issue I've thought about quite a bit, but haven't written about here yet: the targeting of child support measures by parent quality, especially in the tax structure.  Having a decent theoretical and empirical framework that can accommodate the multiplicity of interests at stake here would be welcome, and lots of the public discussion doesn't have either. 

Religion Update

Less Wrong writes:

Religion is what you get when you push totally for non-evidential memetic success. All ties to reality are essentially cut. As a result, all the other dials can be pushed up to 11. God is not just wise, nice, and powerful - he is all knowing, omnibenificent, and omnipotent. Heaven and Hell are not just pleasant and unpleasant places you can spend a long time in - they are the very best possible and the very worst possible experiences, and for all eternity. Religion doesn't just make people better; it is the sole source of morality. And so on; because all of these things happen "offstage", there's no contradictory evidence when you turn the dials up, so of course they'll end up on the highest settings.

This freedom is theism's defining characteristic. Even the most stupid pseudoscience is to some extent about "evidence": people wouldn't believe in it if they didn't think they had evidence for it, though we now understand the cognitive biases and other effects that lead them to think so. That's why there are no homeopathic cures for amputation.

I'm not sure if this is totally true -- religions seems to face lots of constraints on what they can claim, including evidential ones.  Evidence just doesn't work quite the same the way as in other fields, but the differences are a lot subtler than described here -- what is the best way to describe how it does work? 

Looking for a Middle Way, Sequencing and the Option Value of Waiting

Abu Muqawama writes:

By saying -- in Afghanistan and Pakistan -- that we're not going to allow the terrorists to maintain safe havens from which they can plot and train to carry out attacks, the Obama team now has to explain why we're not pursuing the same kind of whole-of-government approach toward bringing effective governance to the Horn of Africa. And the flip side to that question is even more devastating: if we're not doing it in Somalia, why are we wasting our time and money doing in Afghanistan and Pakistan? This, to me, is the biggest problem I see in the Obama plan for Afghanistan and Pakistan. It's not that we are establishing some terrible precedent, really, but rather that you can point to places on the map where similar problems to the ones in the Pashtun tribal belt present themselves and are not being addressed -- or even discussed -- in the same way. Why have we been seeking to manage the piracy problem off the Horn of Africa -- and the terror problem within the Horn of Africa -- yet are pursuing far more ambitious means and ends in Afghanistan and Pakistan?
Depending on the perspective from which you ask this question, you could either get drawn into a strong argument for taking population-centric counter-insurgency operations to all kinds of new places on the globe or be drawn into an even stronger argument for a new(ish) kind of realist argument about terror and how we address it. I'm not sure I like being caught between imperialism and off-shore balancing, though. Surely there is a middle way?

Why can't you eat horse meat in the US even under the Bush Administration?

Al Roth posts:

The first sentence of Repugnance as a Constraint on Markets asks "Why can't you eat horse meat" in California? The answer is that it's against the law. But while similar bills to outlaw the sale of horse meat for human consumption have passed by big majorities in the U.S. House of Representatives, they have never managed to pass into law. Nationally such bills are opposed (as they were in California) by many horse breeders, cattle ranchers, and veterinarians. Nevertheless, the department of Agriculture removed funds for inspection of slaughterhouses.

Now the NY Times reports: Surge in Abandoned Horses Renews Debate Over Slaughterhouses .

"Emaciated horses eating bark off trees. Abandoned horses tied to telephone poles. Horses subsisting on feces, walking among carcasses.
As the economy continues to falter, law enforcement officers in Kentucky and throughout the country are seeing major increases in the number of unwanted and neglected horses, some abandoned on public land, others left to starve by their owners.
The situation has renewed the debate over whether reopening slaughterhouses in the United States — the last ones closed in 2007 — would help address the problem. Some states, Missouri, Montana and North and South Dakota, for example, are looking at ways to bring slaughterhouses back. "

Earth Science Factoids

I'm not sure what to make of these two claims I ran across this week.  It would be nice to know more.

RealClimate:

There is a standard theorem of oceanography called Sandström's theorem which basically states that it is really hard to do any work on a system, like the ocean, if you are cooling and heating at the same level (i.e. the surface). By contrast, the atmosphere is heated from below (since the atmosphere is mostly transparent to solar radiation), and cooled from above and so can behave as a relatively efficient heat engine. Since we observe however that the ocean does have a large-scale deep circulation, it can't therefore be 'driven' (in an energetic sense) from the cooling of waters in the high latitudes. The alternate name, 'the Thermohaline Circulation', does tend to perpetuate the idea that it is the temperature and salinity fluxes that 'drive' the circulation, and so is slowly falling into disfavour (though it is still widely used and defended).

But if this deep circulation doesn't derive its energy from density contrasts, where does it get the energy from? Most of the energy in the oceans is derived from two sources, the winds and the tides. Both of these forces generate small scale turbulence and internal waves which cause mixing of ocean waters. It is this mixing which energetically fuels the deep ocean circulation.

Since the winds will continue to blow and the Earth continue to turn, does this mean that there can't be any changes to the MOC? Emphatically no. The circulation may well derive it's energy from the winds and tides, but it is heavily steered by density contrasts and the stratification of the ocean (witness the difference between the North Pacific and the North Atlantic). Changes in that modulation can have profound effects on the currents, and in particular, additions of fresh water from massive lake drainages (i.e. the 8.2 kyr event) or ice sheet collapses (the Heinrich events) most likely caused severe slowdowns or shutdowns of the MOC in the past. Wunsch is a little sceptical of this research (he calls fresh water the 'deus ex machina' of climate change), but in this he is probably mistaken - for instance, there is enough information from the 8.2 kyr event to reasonably attribute it to the drainage of Lake Agassiz into Hudson Bay.

Thus while density changes don't 'drive' the circulation (in an energetic sense) they can 'drive' (in a modulating sense) changes in that circulation. If this seems complicated, think of the example of greenhouse gases - they don't drive the climate in an energetic sense (the sun does), but they can drive changes in the climate (by modulating radiation flow in the atmosphere).

Time to find a good ocean circulation book. I do have Wunsch's book from the 1990s, but I may want to find a different treatment. Ah, here is a Wunsch 2008 review article: Ocean Circulation Kinetic Energy: Reservoirs, Sources, and Sinks. Or a 2004 Ferrari and Wunsch article, VERTICAL MIXING, ENERGY, AND THE GENERAL CIRCULATION OF THE OCEANS: 

The coexistence in the deep ocean of a finite, stable stratification, a strong meridional overturning circulation, and mesoscale eddies raises complex questions concerning the circulation energetics. In particular, small-scale mixing processes are necessary to resupply the potential energy removed in the interior by the overturning and eddy-generating process. A number of lines of evidence, none complete, suggest that the oceanic general circulation, far from being a heat engine, is almost wholly governed by the forcing of the wind field and secondarily by deep water tides. In detail however, the budget of mechanical energy input into the ocean is poorly constrained. The now inescapable conclusion that over most of the ocean significant “vertical” mixing is confined to topographically complex boundary areas implies a potentially radically different interior circulation than is possible with uniform mixing. Whether ocean circulation models, either simple box or full numerical ones, neither explicitly accounting for the energy input into the system nor providing for spatial variability in the mixing, have any physical relevance under changed climate conditions is at issue.

Wiki on the geothermal gradient:

If [the] rate of temperature change were constant, temperatures deep in the Earth would soon reach the point where all known rocks would melt. We know, however, that the earth's mantle is solid because it transmits S-waves. The temperature gradient dramatically decreases with depth for two reasons. First, radioactive heat production is concentrated within the crust of the Earth, and particularly within the upper part of the crust, as concentrations of uranium, thorium, and potassium are highest there: these three elements are the main producers of radioactive heat within the Earth. Second, the mechanism of thermal transport changes from conduction, as within the rigid tectonic plates, to convection, in the portion of Earth's mantle that convects. Despite its solidity, most of the Earth's mantle behaves over long time-scales as a fluid, and heat is transported by advection, or material transport. Thus, the geothermal gradient within the bulk of Earth's mantle is of the order of 0.3 kelvin per kilometer, and is determined by the adiabatic gradient associated with mantle material (peridotite in the upper mantle).

How do we know that uranium, thorium and potassium are concentrated in the upper mantle crust?  I assume there are theoretical reasons to believe this, but what are they? Ah, this is crust, not upper mantle...so yes, I can see how we might know this.  I was wondering how we'd know about concentrations in the upper vs. lower mantle. 

Which reminds me, how much radiative vs. convective heat flow is there in different layers of the sun?  I assume it's mostly radiative heat flow. Ah, flow from the solar core to the surface convective zone is radiative, some convective heat flow in the convective zone.  

The convection zone is the outer-most layer of the solar interior. It extends from a depth of about 200,000 km right up to the visible surface. At the base of the convection zone the temperature is about 2,000,000° C. This is "cool" enough for the heavier ions (such as carbon, nitrogen, oxygen, calcium, and iron) to hold onto some of their electrons. This makes the material more opaque so that it is harder for radiation to get through. This traps heat that ultimately makes the fluid unstable and it starts to "boil" or convect. Convection occurs when the temperature gradient (the rate at which the temperature falls with height or radius) gets larger than the adiabatic gradient (the rate at which the temperature would fall if a volume of material were moved higher without adding heat).

Glimmers of Hope: A leading indicator in the Job Market?

Econbrowser writes:

Fed Chair Ben Bernanke a few weeks ago said he saw some green shoots of favorable developments in financial markets [Also mentioned by Obama today as a 'glimmer of hope'.]. Does today's Labor Department report that the seasonally adjusted number of initial claims for unemployment insurance fell by 20,000 workers in the most recent week constitute another?

This story in the Wall Street Journal a few weeks ago also caught my attention:

"There's growing evidence supporting the optimists' view, and I am surprised at that," said Robert J. Gordon, an economist at Northwestern University and a member of the National Bureau of Economic Research committee that is the official arbiter of when recessions begin and end. "I was sort of in the pessimists' camp until I started looking at things."

He points to one indicator in particular with a remarkable track record: the number of Americans filing new claims for unemployment benefits. In past recessions, it has hit its peak about four weeks before the economy hit a trough and began to grow again. As of right now, the four-week average of new claims hit its peak of 650,000 in the week ended March 14. Based on the model, "if there's no further rise, we're looking at a trough coming in April or May," he said, which is far earlier than most forecasts currently anticipate.

I was curious to take a look at the pattern that Gordon identified. The graph below plots 4-week averages of the initial unemployment claims going back to 1967, with vertical lines drawn at the first week of the month in which the NBER eventually declared that a recovery from the recession began. Gordon's relation is indeed pretty striking-- in each of the last six recessions, the recovery began within 8 weeks of the peak in new unemployment claims.

Well, it does look like there a few false signals there if one just looks at the sign of movement in the 4-week average, in 1982, 1991 and 2000, so it needs to be a decrease above a certain size, not yet what we've seen in the data. Still, surprising for an employment related series, especially once one takes out strike related movements.  So, what's happening to hours and electricity use by industry, theoretically better indicators? 

Hm, average weekly hours for production workers as still falling seasonally adjusted in March.  On first glance industrial electricity use in February doesn't look bad, but I don't understand how to do the seasonal adjustment yet.  And there are higher frequency data sources than the EIA. 

Here are levels and year-over-year growth of US industrial electricity use.  One warning: seasonal patterns are not necessarily stable over business cycles, but instead often become stronger in downturns, for instance with seasonal periods of plant shutdowns extended.  And for some unclear reason February in the US has a strong upward tick in industrial electricity use, with this February weaker than the average February compared to January.  

 

Update #1 (April 14): Goldman Sachs looks at the numbers for the average of initial unemployment claims:

Roughly speaking, a 20,000 decline in the 4-week moving average corresponds to a 50% probability that the peak has already been reached, and a 40,000 improvement to a 90% probability.

What are 'Competitive Devaluations' and when are they bad?

I couldn't say right now, something I probably should try to remedy (it is probably something about a 2nd best policy in a distorted economy).  See for instance the G-20 communique from last week:

We will conduct all our economic policies cooperatively and responsibly with regard to the impact on other countries and will refrain from competitive devaluation of our currencies and promote a stable and well-functioning international monetary system.

I'm reminded of this since Money Illusion has a bit of a rant on the topic, but he's confusing, I think, 'competitive devaluations' with 'all devaluations'.  But even if both categories aren't coextensive, what is a competitive devaluation and when is it bad?  Not clear to me (yet).  I'd be terribly surprised if the category of bad devaluations includes all competitive devaluations, if competitive devaluations are understood as devaluations designed to give that country's exporters a competitive price advantage (don't all devaluations do that?). 

But there is still the question of when devaluations impose welfare costs on other countries that are too large to offset the welfare gains of the devaluing country.  (I could see there being some role for policy coordination here, with coordinated demand expansion and no devaluations, but what if that policy coordination, say because of different outcome objectives and inability to make side payments, isn't possible?)

The terminology in this discussion seems awfully sloppy, probably by design.  Mostly 'competitive devaluation' seems to mean 'bad devaluation' and where people draw the line on 'bad devaluations' depends on their particular interests. 

Contemporary Minifauna Outside

My wife has been feeding them more than the recommended amount of pellets -- 'they looked hungry' --, but that had the foreseeable results.

Recently Extinct Megafauna Update

Dennis M. Hansen and Mauro Galetti write in Science:

Scientists have argued that in continental Central and South America, the extinction of the classic mammalian megafauna--such as giant ground sloths and gomphotheres--caused disruption of seed dispersal for large fruits (4, 5). However, on islands, the extinction of large birds and reptiles in the past two or three millennia has led to similar disruptions (8, 9). ....
[T]he largest frugivores in South America were gomphoteres (7580 kg), whereas the largest living frugivores are the tapirs (300 kg). On the continental island of Madagascar, the role of largest frugivore has passed from the elephant bird (450 kg) to the radiated tortoise (10 kg). On Mauritius, giant tortoises weighing up to 100 kg were the largest native frugivores; today, the title goes to a fruitbat weighing only 0.54 kg. Thus, the loss of the island giants--tortoises, lizards, and flightless birds such as the dodo that were once found on many islands--has, in relative terms, led to a greater megafaunal downsizing than the extinction of even the largest gomphotheres in South America.  ....
If all currently threatened vertebrate frugivores were to go extinct, the relative ecological shrinkage in many continental ecosystems would equal that of islands. For instance, if all threatened frugivores in South America were to go extinct, the largest remaining frugivore would be the howler monkey, weighing 9 kg--a factor of 700 less than the giant ground sloth. Even some islands stand to suffer further losses; in Mauritius, the largest nonthreatened native frugivore is the gray white-eye, a bird weighing a mere 0.009 kg.

Here are two gomphotheres -- which did have overlap with humans, with many now extinct or marginal fruit plants specialized for dispersal via them (see Janzen 1982 and more critically Howe 1985).  BTW, this is part of the backdrop for the 'Rewildering North America' movement (see also a critique of the movement). 

Update #1: some examples of megafauna fruit (not clear if these are all from South America and I'm not going to spend time figuring it out):